Marketing in a Recession
It’s a fact that under testing economic conditions one of the first budgets to be cut is marketing. Why? I guess it’s because many perceive it to have low value and that their business can manage without it. And when you’re desperately looking at ways to reduce costs you can understand why. Unfortunately, this is the one of the worst things you can do.
While marketing is closely related to sales they remain two very different things. If we think of marketing as a means of bringing people to your business and sales as the process of then persuading those people to purchase your product or service, then it follows that reducing the amount of marketing you do will reduce the number of people coming to your business. It isn’t rocket science. At a time when sales are already under pressure surely the last thing you should consider is reducing the number of people knocking on your door. But by reducing the amount of marketing you do that’s exactly what you’re doing. Customers and prospects alike will forget about you if you aren’t marketing to them and who do you think they will turn to instead? A competitor who realises the value of marketing, that’s who.
So how can you afford to maintain a strong presence in your market even though your revenues are down? The first thing to do is to have a look at your existing marketing plan, if you have one, or if you haven’t, start making one. You need to assess which activities will work best and what will provide the best value for money. Explore different ways to promote your business by speaking to an expert – this could be a marketing agency, a graphic designer or even, ahem, a printer (who will have undoubtedly printed many items as part of a successful marketing strategy), all of whom will be more than happy to help.
Deciding how much to allocate to your marketing activities is the next step. I recently started a discussion on LinkedIn asking what people thought was the best way of setting a marketing budget and amongst many different suggestions one really stood out for me: don’t set a budget! Find what activity is the most effective for you and spend as much as you can afford on doing it, after all if it’s working whatever you spend will be more than recovered through increased sales.
Finding out what works well for you needn’t be difficult, in fact you may even have a good idea already. It is good practice to test your marketing activities first wherever possible. An example of this could be only sending 50-100 letters of a direct mail campaign and measuring the response rate. If you’re satisfied, great, roll out the entire campaign. If you aren’t satisfied, consider how you could improve it and test again.
Regardless of which activities you choose, the cycle of test-measure-improve-deploy should be used indefinitely, even once you’re satisfied with the success of your campaign. Only by consistently monitoring the success of your campaign and looking closely at who is responding will you be able to maintain and improve its effectiveness. So if you notice that businesses of a certain size or people of a certain age seem to be more responsive than others you will be able to review who to target your marketing activities at, both in a sense of who to aim at and how to communicate with that group in particular.
To summarise, don’t cut your marketing spend when finances are tight, even though it may seem to be an easy option. It actually represents a great opportunity as you can be certain that many of your competitors will have reduced or even ceased their marketing activity giving you the chance to increase your market share at their expense. Try to be cleverer about what you’re spending your money on and make sure that your activities are as effective as possible by seeking advice from experts and by testing your campaign before fully rolling it out. Remember, if you aren’t marketing no-one will know you’re out there.
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